There are more than 600,000 seniors have who obtained reverse mortgages in the recent times which has helped them to save their homes. However, there are certain myths which confuse the senior citizens and they do not know whether or not it would be beneficial for them to go for a reverse loan.
Take a look at some of the common reverse home loan myths and the facts regarding it:
Myth: Mortgage lender will own the home if I take a reverse mortgage.
Truth - Though most homeowners believe that the reverse loan lender would own the property, the fact remains that homeowners will be able to retain the title and ownership to their home during their lifetime. They may even sell off the property whenever they wish to but they will have to pay off the dues after the property sale is over.
Myth: Heirs will be responsible for the repayment of the loan.
Truth - The property is sold off to pay the loan after the homeowner is deceased or decides to leave the home for other reasons. The heirs will not have to repay the loan. However, if the heirs want to keep the property, then they would have to pay the balance in full.
Myth: The lender will evict me if I outlive my life expectancy.
Truth - Reverse home loan lenders cannot put a time limit on how long seniors will be able to stay in their homes. The borrowers are still the owners of the property. Thus, the lenders will not be able to evict them if the borrowers follow the required guidelines of the loan.
Myth: Reverse mortgage proceeds cannot be used as per my wishes.
Truth - There is no such restrictions in case of usage of reverse mortgage proceeds. The funds can be used for any purpose. The funds from the loan can be used to pay off debts, to improve home, have a financial reserve, etc.